Credit Card Service Tax May be absorbed by Banks

27th Oct 2009
Banks likely to come up with a scheme for users

PETALING JAYA: Banks are likely to absorb the RM50 service tax on credit cards, considering that they already provide cardholders with rebates worth more than this.

For example, RHB Bank gives a 2% rebate for cardholders who shop at Tesco and Citibank does the same for its members using their credit cards at Giant.

Banks are also providing similar rebates for petrol purchases. “A 2% rebate on a RM200 a month bill works out to close to RM50 a year. So it is no big deal for the banks to subsidise the RM50 service charge, but it would only wish to do so with active users (of the credit cards),” noted an industry player.
Charles Sik... ‘Details have yet to be made known to the banking fraternity and much would depend on how it is implemented.’

Hence, it is understood that banks may come up with a scheme where only users who spend a certain amount on the cards will enjoy a waiver of the service tax.

Under Budget 2010, the government said it would impose an annual RM50 service tax on each principal credit and charge card, including free cards, and RM25 for each supplementary card from January next year.

Until the banks decide on the service tax waiver, cardholders with unused credit cards may decide to cancel them.

Indeed, the measure is expected to promote prudent spending with the number of credit cards having increased from more than 2 million in 1997 to 11 million as at August 2009, excluding 285,000 charge cards.

Meanwhile, analysts said the impact of the service charge on credit cards was expected to be “mildly negative” for the banking industry.

A Kenanga Research analyst who covers the sector said credit card loans in the country’s banking industry made up less than 5% of total loans.

“It’s pretty hard to quantify the impact at this juncture, but based on this alone, I would say the impact would be mildly negative,” he said.

Jupiter Securities head of research Pong Teng Siew said he was expecting about 25% of current cardholders, especially those with more than one card, to cancel their inactive cards following this proposal.

“On the whole, the banking industry’s profitability might not be affected much, but in the case of some banks, especially those which have depended on their credit segment to drive growth these past years, the impact could be substantial,” he said.

There are currently 9.7 million and 2.3 million principal and supplementary cards respectively circulating in the system, up from 2.8 million collectively in 2000.

In a note to clients yesterday, ECM Libra said the service tax could well see the banking system incur up to RM542.5mil in additional expenses arising from this measure should they wish to maintain existing levels of business.

Alternatively, they could “lose” as much as 50% of the cards issued but the “subsidy” to potential spenders from the system (on the assumption of the current 21.6% utilisation rate) may be reduced to about RM280mil, the research house said.

OCBC Bank (M) Bhd head of consumer financial services Charles Sik said it was “probably too early” to establish the specific implications of the move to impose the across-the-board service taxes.

“Details have yet to be made known to the banking fraternity, and much would depend on how it is implemented. In any case, the consumer or the banking industry would have to bear the cost for this new source of income for the government.” Sik told StarBiz.

Most major banks declined comment when contacted.

Tax on Credit Cards - 2010 Budget

During the budget speech on 23 rd October 2009 our PM annouced that to curb credit cards abuses, the government will impose a tax ob RM50 per annum tax for primciple card and RM25 for supplementary card.

This will certainly prompt people who hold more than one card to return them to the issuers. Certainly this will have an impact on the usage of credit cards, and mostly affecting the card issuers as more people opt to hold fewer cards.

Whether this move will curb spending is yet to be seen. Because instead of spending on several cards,people will spend on a fewer cards in hand, thus the total spend may not reduce.

Writing a Will

Recently the there was a news that a total of RM1.5 billion of assets were left behind by people who died without a will or intestate. Beside there are many complications when someone died without a will. The surviving benefit(s) has to obtain a letter of administration from the Land office, and this usually takes any time from 2 to 3 years.

To ensure your assets are distributed according to you will to the rightful beneficiaries you need to write a will. It may seem unimportant when you are young and healthy, but you never know whether you will get into an accident or heart attack and leave this world suddenly.

There are many professional services for will writing like Public Trust, Rockwill, and in fact many financial service institution provide such service.

Guide lines for a will

· Anyone aged 18 and above is eligible to get a Will written.
· Information required: person’s assets, names of beneficiaries, details of executors /guardians (if any) and instructions on how the assets should be distributed.
· The Will can be hand-written, typed or printed, and in any language.
· Two witnesses must be present at the signing of the Will
· The Will takes effect only upon death.
· It is revocable before your death when:
a. You (re)marry.
b. You make a new Will
c. You convert to Islam
· Choose carefully who you want to be the executor(s) of your Will. The ideal number is two although you can have a maximum of four.
· If you are unable to find a suitable executor, you can name a trust corporation to act as executor.
· If you have young children, appoint a personal guardian for them, especially if you feel your spouse is incapable of looking after them.
· You may choose a different person to handle financial matters.
· Having joint property or joint bank accounts with your spouse does not mean that he or she will automatically inherit your half share if you die intestate.

Gold Price Hit Record High

The price of gold struck an all-time high Tuesday as the dollar fell on a news report of a plan by Gulf states to stop using the greenback for oil trading.

LONDON (AFP) - – The price of gold struck an all-time high Tuesday as the dollar fell on a news report of a plan by Gulf states to stop using the greenback for oil trading.

Gold hit 1,045.00 dollars per ounce on the New York Mercantile Exchange in late trades.

Hours earlier on the London Bullion Market, gold surged to 1,043.78 dollars beating the previous record high of 1,032.70 dollars an ounce struck in March, 2008.

Barclays Capital precious metals analyst Suki Cooper said dollar weakness appeared to be related to reported secret talks about oil being priced in a basket of currencies including gold rather than the dollar,

This "has added to concerns about the future role of the dollar in international financial markets," Cooper said.

The dollar's future as the world's top currency was thrown into doubt on Tuesday as a report said Arab states had launched secret moves with China and Russia to stop using the greenback for oil trading.

Arab states have launched steps with China, Russia, Japan and France to stop using the dollar for oil trades, British daily The Independent reported on Tuesday, but the report was denied by Kuwait and Qatar and reportedly by other nations.

The Independent's Middle East correspondent Robert Fisk wrote in his paper: "In the most profound financial change in recent Middle East history, Gulf Arabs are planning -- along with China, Russia, Japan and France -- to end dollar dealings for oil."

They would instead switch "to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council (GCC), including Saudi Arabia, Abu Dhabi, Kuwait and Qatar," added Fisk.

Gold, viewed as a safe-haven investment, has won back favour in recent months as the global economy struggles out of its worst slump in decades.

The run-up in gold has been largely driven by weakness in the dollar, which makes dollar-priced commodities cheaper for holders of stronger currencies, boosting demand.

Gold also wins support from fears about higher inflation because the metal is widely regarded by investors as a safe store of value.

Precious metals consultancy GFMS last month warned that the current upward trend in gold may not be sustainable should global stimulus packages fail to boost flagging demand in the battered world economy and inflation fall as a result.

The Group of 20 leaders of emerging and developed nations recently agreed at a summit in Pittsburgh not to roll back massive stimulus measures that helped contain a severe global recession.

VIPs Blacklisted for not paying study loans

It is a good move of the government to bar these defaulters from travelling abroad. Of all people these Vips should undesrtand that they are depriving deserving students from obtaining the study loans. This is big money,people owing RM400 million!

VIPs blacklisted for not paying study loans
By KAREN CHAPMAN

PETALING JAYA: They are known as Yang Berhormat and Yang Berbahagia (YBs) but now some of them have earned the not-so-pleasant status of Yang Berhutang (debtor).

These YBs (the prefix used for elected representatives and those who carry honorary titles like Datuk) are not the only public figures on the list of National Higher Education Fund Corporation loan defaulters.

Professionals and celebrities are also among the 26,000-odd people who owe a whopping RM400mil.

The corporation’s chief executive, Yunos Abd Ghani, said the defaulters included those who studied medicine, law and business.

He said the corporation had to resort to barring the defaulters from leaving the country because they had been ignoring repeated reminders to repay their loans for more than five years.

Of the 26,627 names submitted to the Immigration Department since the corporation started recommending the travel restriction in August last year, 4% or 1,018 had settled their loans amounting to more than RM20mil, he said.

“This (overseas travel ban) has been an effective method as they have no other alternative but to settle what they owe,” he told The Star.

“We don’t apply double standards in implementing the action,” he said, adding that borrowers could check if they were barred from travelling overseas via the corporation and Immigration Department websites.

When asked what excuses the borrowers gave for not settling their debts on completion of their studies, Yunos said they often claimed they did not receive the corporation’s notices.

“Change of address is a favourite excuse despite their legal obligation to update their latest addresses with the corporation,” he said.

Yunos said barring defaulters from going overseas was a last resort.

Since the corporation began operations in 1997, he said it had disbursed RM18bil in loans.

In general, Yunos said that 76% of borrowers start repaying their loans as soon as they finished their studies.

Source: The star on line

Don't Put Off Making a Will

If you don’t have a legal will, take heed – without your will, there is no guarantee your loved ones will be provided for when you die. In fact, your treasured possessions could become government property. Here are some tips to get started:

Do your homework Research the estimated value of your belongings and assets. You may be surprised at how much you are worth.

Seek expert advice While do-it-yourself kits are readily available, it is worth enlisting a solicitor to draft your will and ensure it is legally valid.

Keep it updated Any major life event, such as marriage or the birth of grandchildren, should prompt you to change your will. Make sure you include the phrase “I revoke all previous wills” in the new version.

Store in a safe place You won’t be around to find your safely stowed-away documents. Let loved ones know where to find your will, or give it to your solicitor for safekeeping.

Think beyond the grave Many people nominate a charitable cause as a beneficiary. Contact your favourite charity to find out more about their recommendations for bequeathing funds.

Source:Reader Digest

Gold Vs Dollar

Gold above USD1,000

The gold contract for December delivery climbed to $1,004.70 on the Comex division of the New York Mercantile Exchange, according to Bloomberg. Gold for immediate delivery also breached the $1,000 mark, climbing to $1,002.73 an ounce.

The metal, which has gained 14pc so far this year and is on course for its ninth straight year of gains, is often bought by investors as hedge against the threat of inflation as well as a weaker dollar.

Gold futures reached a record $1,033.90 an ounce in March last year as the world grappled with the economic fallout from the global banking crisis.

"The reasons to own gold as an investment case make sense," Greg Gibbs, a strategist at the Royal Bank of Scotland, told Bloomberg. "It is a hedge against policy makers losing control of fiscal and quantitative monetary policies."

The latest figures show that investors are buying more gold. 222.4 tons of bullion were snapped up in the second quarter, 46pc higher than the same period in 2008, according to the World Gold Council.

"Capital Protected"

On 9th September 2009, Monetary Authority of Singapore(MAS) banned the use of the phrase "capital protected" for structured investment. It is a good move, and Malaysia should do the same because many investors are confused between "capital protected" and "capital guaranteed". In Capital protected, the investment is not necessary protected in the sense that investor may not get back 100% of their investment at maturity, whereas in "capital guaranteed", investors will at least get back 100% of initial investment at maturity.

How to be Good with Your Money

How to be Good with Money
by Susannah Hickling February 2009


Most of us probably resolve to be more sensible with money in these times. We're going to live frugally, save regularly and not go into the red. But, mysteriously, within a few months we seem to have run up a credit card debt and blown our savings on a holiday. The truth is that you don't need cast-iron discipline or the wisdom of Warren Buffett. Here are some easy steps to get you from profligate to prudent this year - while still enjoying life.



• Find out if your books balance. Get out all your bank statements and work out how much you've earned - include benefits and interest on savings - and how much you've spent over the past year.

• Bank online and check your balance twice a week. This will give you a clear idea of what's going in and coming out.

• Junk useless direct debits. Don't just go on paying for that life cover you don't need.

• Build up a rainy-day fund. Set up a monthly direct debit to put money aside in a high-interest account.

• Organise all your payments. Have your direct debits going out just after your salary is paid in. The rest is yours - to transfer into a savings account paying a better rate of interest than your current account. Transfer back as and when you need extra cash.

• Buy now, pay at once. If you can't afford something one month, wait until the next.

• Use your credit card sparingly. Pull out the plastic when you absolutely have to have that half-price dress in the sales. But always pay it off before it incurs any interest.

• Always shop around when contracts - like your internet and mobile phone service provider - come up for renewal. Don't forget to ring your existing provider to see if it can offer you something better.

• Buy treats with reward points schemes. Use all those points you've accumulated on your various cards to give yourself a treat. Spoil yourself - after all, you deserve it.

Source: Reader Digest

Retirement

It is general true that many Malaysians are ill prepared financially for retirement. As reported by EPF,within 3 years of withdrawal upon retirement their funds are exhausted. Basically, when these Seniors were younger they did not have the opportunity to be exposed to financial planning, unlike nowadays we have many financial planners as well as plenty of financial information and products. However, it is better to start somewhere for the Seniors.

Read the following..
Malaysians less confident about preparing for retirement
By LAALITHA HUNT

LOTS of working adults are paralysed when it comes to planning for retirement. Most people will delay this as long as they can, possibly due to their lack of knowledge about financial matters.

Generally, the more knowledgeable an individual, the more confident he is in taking control of his financial destiny, which usually is about securing a comfortable retirement.

A recent study by the non-profit Employee Benefit Research Institute in the United States found that only 13% of Americans said they were confident of a comfortable retirement – drastically reduced from 27% in 2007.

Figures in Malaysia show a similar sentiment. The AXA Life Outlook Index findings for 2009 indicate that Malaysians’ satisfaction with their preparation for retirement has dropped. In 2007, 23% were confident about their retirement years, but this has since dipped to 14%.

While many working Malaysians are reasonably financially literate, certain groups are less so and therefore less confident in managing their finances. This is a worry considering that the elderly make up an increasingly large proportion of our society.

Demographic and socio-economic forecasting provider Global Demographics Ltd forecasts senior citizens (those 50 years and above) to increase from 15% to 25% of the total Malaysian population over the next 20 years.

As the Malaysian population ages and retirement looms for many, the issue of financial literacy in a retirement planning context has become particularly salient.

Abacus for Money chief executive officer Carol Yip says that there is no single product or solution available to guarantee one’s comfortable retirement.

She notes that the main asset likely to be available to most working Malaysians upon their retirement is their Employees Provident Fund contribution.

Other assets may include property, shares, unit trusts, term deposits, inheritance, insurance, government pension as well as emerging private pension funds.

Yip asserts that individuals must increase their level of financial literacy so that they can go cherry-picking from the wide array of products available in order to ensure a comfortable retirement.

Besides the usual means of consulting financial planners and reading financial magazines to improve financial literacy, Yip calls upon employers to provide training to their staff in order to empower them with financial knowledge to plan their future.

Yip also encourages retirees who are in the early stage of retirement to equip themselves with financial knowledge in order to wisely invest their money so as to protect it from inflation as well as to provide recurring income over the medium term.

The senior citizen population of 50 and above in Malaysia as well as regionally is said to be rapidly expanding into a large, affluent market.

MasterCard Asia Pacific, in a study, estimates that the spending power of the retired population in Malaysia to exceed US$10bil (RM35bil) by 2015 – more than double the figure from 10 years before.

Madam Chong (not her real name), 56, who recently retired but is still an active investor with a moderate risk profile, was looking to diversify her portfolio.

The ideal product that she is looking for is one that can offer recurring income with double-digit returns annually, monthly or quarterly. It should also be capital-guaranteed as well as easy to liquidate with no penalties over five to ten years.

“I was prepared to consider regional investments with a slightly higher risk,” she says.

After looking around, she discovers that there are no such products that meet all her criteria except for two that offer returns between 6% and 7% per annum, but require high deposits of RM250,000.

“There are a couple of insurance companies that offer returns of about 4% annually with smaller deposits,” Chong says.

Given the current economic uncertainty and the absence of investment products specifically catering for retirees, Chong reiterates the need for retirees to be financially savvy instead of just depending on advice from third parties to manage their wealth.

Warren Buffet warns budget deficit harms dollar

Warren Buffett warns budget deficit may harm dollar
Warren Buffett has given warning that the US’s $1.8 trillion (£1.1 trillion) budget deficit could harm the purchasing power of the dollar, even though he admits the American economy “appears to be on a slow path to recovery”.


By James Quinn, US Business Editor
Published: 8:07PM BST 19 Aug 2009
Warren Buffett admitted that the American economy
Warren Buffett admitted that the American economy "appears to be on a slow path to recovery"

Mr Buffett, the world’s second-richest man and famed for his ability to make astute investments, believes that the “gusher of federal money” flowing in to the US economy could eventually fuel inflation and devalue the greenback.

In a comment piece in yesterday’s New York Times, Mr Buffett said that while he “resoundingly applauds” the efforts the Federal Reserve and both the Bush and Obama administrations have made to support the US economy, it does not come without a price.

Writing that the “US economy is now out of the emergency room,” he continues: “Enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects.”

“For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself.”

Mr Buffett likened the threat of what he called “greenback emissions” to that of greenhouse emissions, before urging members of the US Congress to work to reduce the budget deficit by making changes to taxes and spending.

His comments were made as the Pacific Investment Management Company (PIMCO), warned that the dollar’s status as the world’s reserve currency will undoubtedly come to an end.

Curtis Mewbourne, PIMCO’s portfolio manager said in a report that “ we are clearly seeing a loss of status for the US dollar as a store of value”.

Credit Card Scam

Subject: Duped by credit card scam upon check in at Hotel

You arrive at your hotel and check in at the front desk. When checking in, you give the front desk your credit card (for all the charges for your room). You get to your room and settle in. Someone calls the front desk and asked for (example) Room 620 (which happens to be your room).

Your phone rings in your room. You answer and the person on the other end says the following, 'This is the front desk. When checking in, we came across a problem with your charge card information. Please re-read me your credit card number and verify the last 3 digits numbers at the reverse side of your charge card.

Not thinking anything you might give this person your information, since the call seems to come from the front desk. But actually, it is a scam of someone calling from outside the hotel/front desk. They ask for a random
room number. Then, ask you for credit card information and address information.
Sounding so professional that you do think you are talking to the front desk.

If you ever encounter this problem on your vacation, tell the caller that you will be down at the front desk to clear up any problems. Then, go to the front desk and ask if there was a problem. If there was none, inform the manager of the hotel that someone called to scam you of your credit card information acting like a front desk employee.

If you feel that the tips are useful, please forward it to your relatives, friends & colleague.

Becareful with your Credit Cards!

Dear Brothers & Sisters,

I would like to relate an incident that my former colleague ( age 75 yrs) encountered at the General Hospital Kuchng (GH) on 8 th Aug, 2009.

My former colleague went to GH for a check up in the morning, in the process his wallet was picked by someone. After he realized what happened, he reported to the police immediately. By the time he got home around 10.00am the Bank called regarding his credit card and the officer asked whether he has used his card at several petrol stations that morning. He said no, as he has just reported to the Police of his lost. The Bank stopped the card. In fact, the thief has spent around RM600 at Everise, 4 th mile.

Well, this thing happened, but it is good for all of us to be careful with our credit cards. Thieves like to get Senior citizens, so you may want to pass this information along.

Tips about handling Credit cards:

1. If stolen, immediately report to issuing Bank to stop card(s). Important, so that who ever got hold of your card cannot use it like what I related above.

2. Report to the Police in order to secure a formal report for future use with the Bank(s).

3. While in Kuching, just bring along one card only ( if you have several cards ) to reduce your risk.

4. Keep the telephone numbers of the Banks handy so that you can call immediately you experience a card lost. ( Load the number(s) of the Bank(s) in your mobile phone.

5. NEVER keep your PIN numbers with your cards or in your wallet. Memorise the numbers.

These are immediate actions and not exhaustive. What ever it is please be careful.

God bless. Pray that you will never encounter this type of incident.

Brother in Christ,

Alwin

Financial worries of raising a family

Worst is over

According to world famous economist Paul Krugman, the worst is over for the world. World economies are recovering, but these will take longer than expected, something like at least two years. In Malaysia we are optimistic, as the government put in several stimulus plans and other economic activities to move the economy out of recession, we are seeing some results. Hopefully by second quarter next year we may see a positive economic growth. Considering the facts, Malaysia is doing fairly well.

KUALA LUMPUR: The worst is over in the world economy, but full recovery will be a long time coming, said Nobel prize-winning economist Paul Krugman.

He said measures such as sustained government spending, coupled with fiscal stimulus had brought the world to the point of "rough stabilisation", adding a technical recovery in the US was currently in the works.

"The US is roughly at a turning point as we speak," he said at the World Capital Markets Symposium on Aug 10.

Krugman, who is also professor of economics at Princeton University, said it appeared the global economy had avoided "Depression 2.0".

He said, however, there was every reason to believe a recovery would be characterized by higher growth and industrial output, but lagging employment.

"The world looks like it is heading towards becoming a globalised version of Japan in the '90s," he said.

He said a full recovery was at least two years away, and governments would need to try all different measures to bring recovery, such as implementing more stimulus packages.

ASM 1 Malaysia

Yesterday 5 th Aug, the fund was launched. From the news it seem that the reception from the investing public was encouraging as many lined up at ASM offices and Post Offices across the nation to purchase the units. Unlike previous issues which were snapped up on the first day, this one has not. Mostly likely it was because of several issues prior to this one where many had already invested, and perhaps the amount of RM10 billion which is the biggest single issue so far. Well, this means more people can invest in this issue. Because of timing issues, many may not be able to make it on the first day, so this situation is good for these people.

RM10 billion

RM5 billion for Bumiputra
RM3 billion for Chinese
RM1.5 billion for Indians
RM0.5 billion for others

ASM 1 Malaysia

KUALA LUMPUR, July 31 — Malaysians aged 18 and above will be able to subscribe to Permodalan Nasional Berhad's (PNB) Amanah Saham 1 Malaysia (AS1M) starting from Aug 5.

A minimum investment of 100 units at RM1 per unit has been set.

During the 30-day offer period, investors below the age of 55 will be limited to a maximum of 50,000 units while those above 55 will be able to buy up to 100,000 units.

Fifty per cent of units have been reserved for Bumiputeras during the offer period, while the quotas for Chinese, Indians and others have been fixed at 30, 15 and 5 respectively.

Units not taken up under the various quotas will be opened up to all after the offer period expires.

This early commitment that units unsubscribed under racial quotas will be released for general purchase reflects Prime Minister Datuk Seri Najib Razak's resolve to open up the economy and comes after a recent decision to lift ethnic quotas in the stock market.

The move is likely to be well received by the non-Malays who have responded overwhelmingly to recent PNB offerings and fully subscribed all units that were allocated to them in the Amanah Saham Malaysia fund in April and also rushed to buy unsubscribed Bumiputera allocations offered later in July.

The time-limited ethnic quotas will also help boost the credibility of Najib's 1 Malaysia campaign which stresses national unity and after which the fund was named.

"I believe this (limited quotas) is the fairest and most sincere way for PNB to get genuine investors while at the same time giving all Malaysians an equal opportunity to invest," Najib said at the launch of AS1M this morning.

The new fund is one of the "goodies" announced by Najib to mark his first 100 days in office.

Today, he added more "goodies" when he announced that some 50,000 incoming first-year undergraduates at public universities will receive 100 units of AS1M free, courtesy of PNB, Maybank, CIMB Bank, RHB Bank and Pos Malaysia.

According to PNB president and group chief executive officer Tan Sri Hamad Kamarul Piah Che Othman, AS1M will be benchmarked against the Malaysian Government Securities average 5-year yield which is currently between 3.7 and 4 per cent.

"Of course we target to do better," he told reporters this morning.

Hamad also revealed that PNB currently manages about RM120 billion worth of funds of which RM90 billion are funds sourced from the general public. Of the general public funds, some RM7 billion is sourced from the Bumiputera community.

At 10 billion units, AS1M is PNB's biggest fund to date.

Investors can buy it at ASNB, Pos Malaysia, Maybank, CIMB Bank and RHB Bank. No sales charges will be imposed during the offer period.

source: The Malaysian Insider

Another view from Malaysiafinance.blogspot

More funds allocated to local equities, then it should boost equities right!?? Err, well, no actually. The Malaysian exchange is a relatively open exchange, funds can move in and out. If you want to "engineer" a higher market, then do like China, restrict the way foreign funds can move, restrict even more the way locals can invest, make it difficult to invest overseas.

You can establish more local funds, RM5bn here, RM10bn there, but all stocks will fall in line with a certain kind valuation parameters. Say, there is a 30% foreign funds participation now in the market, they are here because of certain growth assumptions relative to valuations offered. If you increase the amount via new local funds, yes it will create more buying, but institutional funds will also have the ability to take profit and seek out less expensive markets. So, say new funds add 5% demand for equities, that could be taking out foreign funds exiting the market by a similar quantum as the move up might look expensive.

The second assumption is that these RM10bn are new funds, these funds are from the public. Who is to say these funds would not have gone to buy equities as well on their own?

There is a danger which no one in mainstream media is saying. You are literally taking out these RM10bn from the economic system. Unless 100% of these funds are in fixed deposits, then the net effect is muted. If these funds come from disposable income, you can argue that the RM10bn is being sucked out of the system. If anyone studied the velocity of money, each RM1 circulating in the economy is actually worth about RM8 to the real economy. Too many of these funds is deflationary and slows domestic economic activity.

Why are ASM PNB funds seemingly being assumed to "guarantee" to return 6%-8% a year? That is not a true certainty. The track record is good though but its not a guarantee.

Think people, think. I do agree that the fund is ok, but we need to be aware of the wider implications and not be blinkered to think at a superficial level only. After all that, I still think this is a "good thing", but we do need to have an appreciation of how the whole thing works.

Potential Credit Card fraud

You must have read a lot about credit card frauds over the past year or so. I personally experienced a suspicious call from someone who claimed to be calling from "card centre". He spoke Bahasa (Malay) and asked about my Visa Card. Usually Bank will identify themselves before continuing, but this guy did not untill I asked him. He said he was from Maybank. But strangely I do not have a Visa card but a Master Card with May bank. I enquired which Bank he is calling from, he said Maybank, but almost immediately he said the line was bad and hanged up the phone. It was unusual for banks to call and put down the phone without saying they will call you back.

Really, we must be very careful when answering calls from Banks or strangers.

Most importantly do not release your credit card numbers over the phone.

If you are suspicious call the Bank to check further.

Always ask probing questions to ensure you are talking to genuine callers.

Always becareful rather than sorry later.

Men have better grip of finance

Research in US showed that men has better control over their finance. Most probably the situation is similar in Malaysia as most men are bread winners who managed the family finances. Read below from The Edge:
EW YORK - Men and women handle their personal finances much differently, research shows, with men more likely to keep a close eye on their spending and investments and to pay their bills on time.

The gender gap emerged in the results of financial planning questionnaires filled out by some 3,500 U.S. workers nationwide for Financial Finesse Inc., an employee benefits company.

The data showed two-thirds of men but just one-third of women said they regularly pay their credit card balances in full, said Liz Davidson, chief executive of the company based in Manhattan Beach, California.

Also, 90% of men said they pay their bills on time each month but only 74% of women said so, it said.

It said 71% of men but 53% of women have a handle on their cash flow so they spend less than they earn each month.

More than half of men but just a third of women said they have an emergency fund to pay their bills for a few months if they lose their job, it said.

Forty percent of men but just 24% of women said they were confident their investments were allocated appropriately, while 73% of men but just 40% of women said they had a general knowledge of stocks, bonds and mutual funds.

Women tend to be less educated in personal finance, said Manisha Thakor, a Houston-based finance expert for women.

Personal finance is not typically taught in schools and, while men may learn it in their traditional roles as providers, women do not in their traditional roles as caretakers, she said.

"Men talk socially about money and business," said Thakor. "Women are talking about nurturing subjects."

Also, women are paid less than men, making such things as paying bills and credit card balances harder, she said.

The workers in the research were filling out online questionnaires to enroll in financial education programs given by Financial Finesse, which provides employee benefits to some 300 mostly larger companies nationwide.

Most of those answering the questionnaires earned between US$60,000 and US$75,000 and were assessing their own financial situations from January through April 2009, Davidson said.

Gold Investment

Lately Bank Negara investigated two companies related to gold investment. The main reason was that these companies are giving returns of about 30% per annum which were on the high side, having known that the current interest rate in the Banks were around 2% to 3% per annum.
Here is what BNM says:

Bank Negara Malaysia has commenced investigations into Genneva Sdn Bhd and Etika Emas Estet Sdn Bhd under suspicion of conducting illegal deposit taking activities in breach of Section 25(1) Banking and Financial Institutions Act 1989 (BAFIA) and Section 4(1) of Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA). Section 25(1) of BAFIA 1989 prohibits any person from receiving, taking, or accepting deposits without having a valid license, whereas Section 4(1) of AMLATFA 2001 prohibits any person from engaging in, or attempting to engage in, or abetting the commission of money laundering activities.

The raids on Genneva Sdn Bhd and Etika Emas Estet Sdn Bhd were conducted today at their premises in Klang Valley following information received from members of the public. Relevant assets and documents of the company were seized for the purpose of investigation.

Members of the public are reminded to be cautious of deposit taking schemes and investment schemes offered through various channels such as the internet, phone calls, or seminars conducted by individuals or companies that are not licensed or approved by the relevant authorities.

Members of the public may refer to the list of licensed institutions authorized to accept deposits which is available on Bank Negara Malaysia's website.

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